China buys soft power with hard cash in Hollywood

With cash flowing faster than the Yangtze river, Hollywood is awash with ever-expanding volumes of Chinese funding, but analysts are warning the film industry there's no such thing as a free lunch.
The Beijing-based Wanda Group's record-breaking deal in January to buy US film studio Legendary Pictures finally confirmed the long-heralded emergence of the world's second biggest box office as a major player in Tinseltown.
The USD 3.5 billion agreement is the largest-ever cultural takeover by China, with US studios keen to capitalize on its burgeoning cinema market at a time when Beijing is pushing entertainment as a source of "soft power."

Legendary, the maker of "Jurassic World," "Godzilla" and the latest Batman trilogy, has grossed more than USD 11 billion worldwide since it was founded in 2005, mostly with the kind of big-budget blockbusters popular with Chinese audiences.
"It's a win-win situation... Because the China market is really incredibly taking off and Hollywood has a real interest in that," Stanley Rosen, a political science professor at the University of Southern California, told AFP.
It is an arrangement that benefits both sides financially, with movies becoming increasingly expensive to produce but the Chinese hungry for Western-made films.

But China, which has yet to make a global hit, is also buying expertise.

"Hollywood has what China lacks, which is storytelling ability, marketing, distribution," Rosen told AFP.
Wanda owner Wang Jianlin, who burst into the international spotlight in 2012 by buying US cinema chain AMC Entertainment for USD 2.6 billion, says the Legendary deal makes his company the highest revenue-generating movie unit in the world.
It also gives future Legendary films direct access to China's booming market, which has become crucial to foreign filmmakers, with North American ticket sales stagnant.
PricewaterhouseCoopers has projected China's box office to rise from USD 4.3 billion in 2014 to USD 8.9 billion in 2019, meaning it would outstrip the US within two years.

In 2014, 8,035 movie screens -- 22 per day -- were installed in China and the screen count stood at 31,627 by the end of 2015, according to official sources.
Underlining the shift in power, Chinese box office monitor EntGroup announced that cinemas took a record USD 1.1 billion in February -- a 70 per cent year-on-year jump -- overtaking the North American monthly revenue for the first time in history.